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A dividend inventory can look particularly tempting when it drops, since you receives a commission to attend. The yield climbs because the share worth falls, and that may flip a boring holding right into a severe earnings producer. The trick is straightforward, although. You desire a enterprise that also generates reliable money, even when the market temper turns bitter. If the dividend depends upon optimism, the cut price can vanish quick. So, let’s take a look at one providing a serious alternative.

T

TELUS (TSX:T) is one in every of Canada’s large telecoms. It sells wi-fi and web companies, and it additionally runs fast-growing aspect companies in well being and digital companies. It has spent years pushing fibre web throughout extra neighbourhoods, whereas attempting to show well being and digital into actual revenue engines as a substitute of “good tales.”

The share worth has not been form, and you’ll see why buyers preserve calling it “down.” TELUS inventory has seen shares fall by about 10% within the final 12 months. Nonetheless, since highs, it’s down even additional. That stoop has a well-recognized trigger.

Larger rates of interest punish something with heavy spending plans and significant debt, and telecoms sit proper in that blast zone. TELUS has additionally handled stress on wi-fi pricing and investor fatigue after years of huge capital spending. The upside of that ache exhibits up in a single place: earnings. TELUS proper now provides up a dividend yield of 9.2%, providing main earnings for at present’s investor.

Into earnings

Now for the proof that the enterprise nonetheless throws off money. In its third quarter of 2025, TELUS reported consolidated working revenues and different earnings of $5.1 billion, and it generated free money circulate of $611 million, up 8% 12 months over 12 months. Administration additionally stated its web debt to earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) leverage ratio improved to three.5 instances by quarter-end; thus, debt worries drive a variety of the inventory’s temper swings.

Earnings appeared combined, which is precisely why the inventory nonetheless feels unloved. TELUS reported web earnings of $431 million in Q3 2025, and it reported adjusted web earnings of $370 million. On a per-share foundation, it confirmed fundamental earnings per share (EPS) of $0.32 and adjusted fundamental EPS of $0.24. It additionally lifted the quarterly dividend to $0.4184 per share, which matched the “preserve paying, continue to grow rigorously” message buyers have come to anticipate from it.

The near-term outlook received extra trustworthy in early December 2025, and I really like that. TELUS set expectations for about $2.15 billion in free money circulate for 2025, and it gave a preliminary free money circulate goal of $2.4 billion for 2026. It additionally stated it’s going to pause dividend development for now, whereas persevering with to pay the dividend on the present stage. The dividend inventory laid out a plan to step down its discounted dividend reinvestment program beginning in 2026. That reads like a dividend inventory that wishes to get its steadiness sheet below management, not one that wishes to win a recognition contest.

Backside line

So, why name TELUS the dividend inventory each investor ought to personal whereas it’s down? As a result of the market already priced in a variety of the frustration, and you continue to get a hefty yield whereas the dividend inventory works by means of its deleveraging plan. Proper now, right here’s what the dividend inventory may earn from even $7,000.

The dangers keep actual, although, particularly debt, competitors, and the truth that a excessive yield can sign stress. For those who can deal with some uneven months and also you need earnings you’ll be able to really really feel, TELUS at these ranges makes a powerful case.